By TIOL News Service

NEW DELHI, OCT 07, 2008 : THE appeal is filed by the Union of India against the judgment and order dated November 30, 2006 of the High Court of Rajasthan (Jaipur Bench) whereby certain directions have been issued by a Single Judge to the Customs Authorities. The High Court held that since the respondents herein were merely summoned under Section 108 of the Customs Act, 1962 to give their statements in the inquiry, anticipatory bail applications filed by them were pre-mature and were required to be disposed of. The Single Judge, therefore, ordered the respondents to appear before the Customs Authorities in response to the summons. He, however, directed that in case the Customs Authorities find that any non- bailable offence has been committed by the respondents, they shall not be arrested without ten days prior notice.

Facts

It is the case of the appellant (Union of India) that Director of Revenue Intelligence was investigating the matter in respect of export of readymade garments by M/s B.A. International valued at Rs. 4.75 crores through various ports during December, 2000 to March, 2003. According to the allegation of the appellant, on the basis of information received from the Income Tax Department on September 15, 2006, investigation was conducted and search operation was carried out at two office premises of M/s B.A. International which revealed that the so-called suppliers of raw material i.e. fabrics and job workers of garments, were bogus and non-existent entities and at the declared address, no such firms or business entities were found. The accused thereby fraudulently availed drawback amounting to Rs. 75 lakhs approximately.

Proceedings were initiated by the Customs Department under the Customs Act, 1962 The respondents were issued summons to appear on September 15, 16, 22, 25, 29 and on October 6, 11, 17 and 26, 2006, so as to enable the Department to investigate the case. The respondents, however, did not join the investigation and there was total non-co- operation by them.

In view of non-co-operation by the respondents, complaints were filed by the Custom Authorities in a competent Court on September 16, 2006 and November 17, 2006 for commission of offences punishable under Sections 174 and 175, Indian Penal Code, 1860.

The accused came to know about the filing of complaints. They, therefore, made applications for anticipatory bail before the District and Sessions Court, Jaipur. The Judge, however, dismissed the applications by an order dated November 22, 2006. The accused approached the High Court of Rajasthan (Jaipur Bench) and the applications were disposed of by the High Court directing the Customs Authorities not to arrest the respondents of any non-bailable offence without ten days prior notice to them.

The said order of the High Court  is challenged by the Union of India before the Supreme Court.

The Supreme Court elaborated on several issues relating to summons and arrest:

Ambit and scope of power of arrest.

The term "arrest" has neither been defined in the Code of Criminal Procedure, 1973 nor in the Indian Penal Code, 1860 nor in any other enactment dealing with offences. The word "arrest" is derived from the French word "arrater" meaning "to stop or stay". It signifies a restraint of a person. "Arrest" is thus a restraint of a man's person, obliging him to be obedient to law. "Arrest" then may be defined as "the execution of the command of a Court of Law or of a duly authorized officer".

Sections 41-44 and 46 of the Code of Criminal Procedure, 1973 deal with arrest of a person. Section 41 empowers a Police Officer to arrest any person without warrant. Section 42 deals with the power of a Police Officer to arrest any person who in the presence of such Police Officer has committed or has been accused of committing a non-cognizable offence and refuses to give his name and residence or gives a name or residence which such officer has reason to believe to be false. Section enables a private person to arrest any person who in his presence commits a non-cognizable offence, or is a proclaimed offender. Section 44 deals with cases of arrest by a Magistrate. Section 46 lays down manner of arrest.

So far as the Customs Act, 1962 is concerned, the power to arrest is contained in Section 104 thereof. It reads thus;

(1) If an officer of customs empowered in this behalf by general or special order of the Commissioner of Customs has reason to believe that any person in India or within the Indian customs waters has committed an offence punishable under section 132 or section 133 or section 135 or section 135A or section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) Every person arrested under sub- section (1) shall, without unnecessary delay, be taken to a magistrate.

(3) Where an officer of customs has arrested any person under sub-section (1), he shall, for the purpose of releasing such person on bail or otherwise, have the same powers and be subject to the same provisions as the officer-in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898).

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898), an offence under this Act shall not be cognizable.

Section 104 thus empowers a Custom Officer to arrest a person if he has `reason to believe' that such person has committed any offence mentioned therein. It also enjoins the officer to take the arrested person to a Magistrate `without unnecessary delay'. The section also provides for release of such person on bail.

Anticipatory bail

Section 438 of the Code makes special provision for granting `anticipatory bail' which was introduced in the present Code of 1973. The expression (`anticipatory bail') has not been defined in the Code. But anticipatory bail means a bail in anticipation of arrest. The expression `anticipatory bail' is a misnomer inasmuch as it is not as if bail presently granted in anticipation of arrest. Where a competent court grants `anticipatory bail', it makes an order that in the event of arrest, a person shall be released on bail. There is no question of release on bail unless a person is arrested and, therefore, it is only on arrest that the order granting anticipatory bail becomes operative.

The power of granting `anticipatory bail' is extraordinary in character and only in exceptional cases where it appears that a person is falsely implicated or a frivolous case is launched against him or "there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail" that such power may be exercised. Thus, the power is `unusual in nature' and is entrusted only to the higher echelons of judicial service, i.e. a Court of Session and a High Court.

Considering the exercise of power by Courts under Section 438 and grant of anticipatory bail in favour of applicants, the `Malimath Committee on Reforms of Criminal Justice System' observed that the provision as to anticipatory bail has often been `misused by rich and influential people'. The Committee, however, opined to retain the provision subject to two conditions;

(i) Public Prosecutor should be heard by the court before granting an application for anticipatory bail; and

(ii) Petition for anticipatory bail should be heard only by the court of competent jurisdiction.

Section 438 has been amended by the Code of Criminal Procedure (Amendment) Act, 2005 which now provides for hearing of Public Prosecutor before granting an application for anticipatory bail. Sub-sections (1A) and (1B) also provide for notice and presence of applicant in the Court seeking anticipatory bail. The said provisions, however, have not been brought into force so far.

Safeguards against abuse of power

It is amply clear that power to arrest a person by a Custom Officer is statutory in character and cannot be interfered with. Such power of arrest can be exercised only in those cases where the Custom Officer has `reason to believe' that a person has been guilty of an offence punishable under Sections 132, 133, 135, 135A or 136 of the Act. Thus, the power must be exercised on objective facts of commission of an offence enumerated and the custom officer has reason to believe that a person sought to be arrested has been guilty of commission of such offence. The power to arrest thus is circumscribed by objective considerations and cannot be exercised on whims, caprice or fancy of the officer.

The section also obliges the Custom Officer to inform the person arrested of the grounds of arrest as soon as may be. The law requires such person to be produced before a Magistrate `without unnecessary delay'.

The law thus, on the one hand, allows a Custom Officer to exercise power to arrest a person who has committed certain offences, and on the other hand, takes due care to ensure individual freedom and liberty by laying down norms and providing safeguards so that the power of arrest is not abused or misused by the authorities.

It is keeping in view these considerations that the Supreme Court had to decide correctness or otherwise of the directions issued by a single Judge of the High Court. `Blanket' order of bail may amount to or result in an invitation to commit an offence or a passport to carry on criminal activities or to afford a shield against any and all types of illegal operations, which, in our judgment, can never be allowed in a society governed by Rule of Law.

Statements under Section 108, Customs Act : Evidentiary value

Sections 107-09 confer power on Custom Officers to examine persons, to summon them to give evidence and to produce documents.

Section 108 does not contemplate magisterial intervention. The power is exercised by a Gazetted Officer of the Department. It obliges the person summoned to state truth upon any subject respecting which he is examined. He is not absolved from speaking truth on the ground that such statement is admissible in evidence and could be used against him. The provision thus enables the officer to elicit truth from the person examined. The underlying object of Section 108 is to ensure that the officer questioning the person gets all the truth concerning the incident.

A Constitution Bench of the Supreme Court in Ramesh Chandra Mehta v. State of West Bengal, had held that a person called upon to make a statement before the Custom Authorities cannot be said to be an accused of an offence. It is, therefore, clear that if a person is called upon to make a statement under Section 108 of the Act and summon is issued for the said purpose, he is bound to comply with such direction. This view has been reiterated in several cases thereafter.

Statements recorded under Section 108 of the Act are distinct and different from statements recorded by Police Officers during the course of investigation under the Code.

Imposition of condition before effecting arrest - Conditions not lawful

In the case on hand, the respondents were only summoned under Section 108 of the Act for recording of their statements. The High Court was conscious and mindful of that fact. It, therefore, held that applications for anticipatory bail, in the circumstances, were pre-mature. They were, accordingly, disposed of by directing the respondents to appear before the Custom Authorities. The Court, however, did not stop there. It stated that even if the Custom Authorities find any non- bailable offence against the applicants (respondents herein), they shall not be arrested "without ten days prior notice to them.

Neither of the above directions can be said to be legal, valid or in consonance with law. Firstly, the order passed by the High Court is a blanket one and seeks to grant protection to respondents in respect of any non-bailable offence. Secondly, it illegally obstructs, interferes and curtails the authority of Custom Officers from exercising statutory power of arrest of a person said to have committed a non-bailable offence by imposing a condition of giving ten days prior notice, a condition not warranted by law. The order passed by the High Court to the extent of directions issued to the Custom Authorities is, therefore set aside.

(See 2008-TIOL-187-SC-CUS in 'Customs' + 2008-TIOL-187-SC-CUS in 'Legal Corner')